Exactly this. An application implies something that has an interactive UI. Most diversions from the “happy path” can be handled by displaying a descriptive text message, informing the user that something in the environment is not right. Exceptions are a natural fit for such problem domains because the application code can be kept relatively straightforward, unencumbered by error-handling branches.

OTOH, infrastructure code that runs as a service must detect every possible error as early as possible and handle it is an ordinary operating condition.